Circle Adds Prepaid Fee Feature to CCTP

Circle has added a prepaid fee feature to its cross-chain transfer protocol, CCTP. Developers can now pay fees in advance using the native gas token of the source chain or USD Coin (USDC). With this feature, developers can handle fees before the transfer instead of deducting the protocol fee from the USDC issued on the destination chain. Users will receive the full amount of USDC they intended to transfer. CCTP began supporting prepaid fees for fast transfers on the 8th. CCTP operates by burning USDC on the source chain and issuing the same amount of USDC on the destination chain. Circle explained in its official documentation that the fast transfer fees vary by route, and previously, the fees were deducted from the transfer amount when USDC was issued on the destination chain. Developers can choose between deducting fees from the transfer amount or paying separately with gas tokens or USDC from the source chain. Circle noted that network fees may apply for both the source and destination chains during CCTP transfers, and that fast transfers incur protocol fees based on the route. Circle is also gradually reducing support for the older CCTP V1, with a reduction starting on October 31 and a complete discontinuation planned for December 1.

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